The Who's Who of Card Grading

by Henry Woodruff
August 9, 2004

In this day and age of sports card collecting, many businesses make their money from selling
cards and memorabilia, while others make their profit from grading cards and authenticating
memorabilia. Companies such as these, whose main goal is applying consistent grading to some
of the most sought-after cards on the market and the authentication of autographs and
collectibles, are some of the most respected and profitable companies in the industry, even
competing with the major card manufacturers in terms of gross income. Companies such as
Professional Sports Authenticator (PSA), Beckett Grading Services (BGS), Sportscard Guaranty
Corporation (SGC) and Global Authentication Inc. (GAI) have come out as the leaders in this
coveted service market. Let's take a closer look at each company.

PSA is a division of Collectors Universe, a publicly traded company that is one of the few
hobby companies listed on The NASDAQ Stock Market. As one of the most respected names in the
business, PSA offers a 10-point grading scale from 1 (Poor to Fair) to 10 (Gem Mint) and has
graded some of the most rare and valuable treasures in the hobby. Remember the 1909-11 T206
Honus Wagner that sold for $1.265 million? PSA graded that find an 8, which labeled it as a
Near Mint-Mint (NM-MT) card. After leading the way in establishing card grading, PSA continues
to come out with new innovations including the PSA Set Registry, which comprises a list of
complete or nearly complete sets of players or years of cards graded by PSA for each customer.
Some of the nicest sets that have ever been sold have been part of the Set Registry. With a
huge milestone of over 10,000 sets now on the Set Registry, PSA has great cause for celebration
of one of its most popular features. PSA also authenticates autographs, tickets and other items,
making it one of the most diverse companies in the hobby. Collectors enjoy going to
www.psacard.com to read the latest articles
on card grading, authentication and auction results and to take part in the site's active message
boards. However, monitoring of the secondary market reveals that PSA may be falling behind in
terms of realized prices to a newer, up-and-coming company, BGS.

BGS, another one of the most respected names in the hobby, offers a 10-point grading scale from
1 (Poor) to 10 (Pristine) and increments of one-half point such as 9.5 (Gem Mint). A grade of BGS
10 is one of the rarest treasures in the industry, topping a PSA 10 by an almost exponential amount
of money on the secondary market. Another important aspect of BGS’ grading system is the option for
collectors to receive a second grade, using a 5-point grading scale, which focuses solely on the
quality of the certified autograph found on many modern-era cards. BGS also lets collectors know
exactly what is wrong or right with their cards by the inclusion of four sub-grades listed under
the final grade. These sub-grades go hand-in-hand with the final grade, meaning you can only get
a grade that is between 0.5-1 higher than the lowest sub-grade. For example, if a card has sub-grades
of 9.5 for centering and corners, 9 for surface, but 8.5 for edges, the card will receive a grade of
9 (Mint). This has allowed collectors to better understand what characteristics are problems for
certain sets and/or years. BGS has arguably become the leading force in the graded-card industry
and often outsells PSA cards of the same grade on the secondary market, as many collectors have
come to believe that BGS is the hardest company from which to get a high grade. Collectors frequently
head to www.beckett.com, home of BGS, to use
the site's price guides and take part in its active message boards. But another respected company,
SGC, has begun to take a piece of the hobby's service market sector.

SGC, a very well-known company who recently reached their 5th anniversary, is a grading company that,
like PSA, seems to attract vintage and pre-war collectors, mostly due to the fact that many feel BGS
has little expertise with vintage cards. Offering a completely different grading scale than the other
main grading companies, SGC uses a 15-point system that begins at 10 (Poor) and goes up to 100 (Pristine).
In comparison, a SGC grade of 86 (NM+) corresponds to a BGS grade of 7.5. Some collectors prefer this
system which offers a wider range of grades between EX+ and Pristine, so that a SGC 88 (NM/MT) would
often be able to garner a premium on the secondary market over a similar SGC 86 (NM+), whereas both
cards would likely grade a 7 or 7.5 from the other companies. To some collectors, a grade that begins
with an 8 just seems more attractive than a grade with a 7 in front of it and this may be the underlying
reason that SGC cards sell better than some of their counterparts from other companies. Watch for SGC
to continue to gain ground on both PSA and BGS in the future as more and more collectors head to
www.sgccard.com to get their cards graded.

GAI, the newest of these card-grading companies, was started by former PSA employees including
Stephen Rocchi, the founder and former President of PSA, and Mike Baker, the former Director of
Grading of PSA. This helps make GAI one of the most respected companies in the hobby. With a
10-point grading scale and one-half point increments similar to BGS, except that a GAI 10 is
called Perfect, it appears to many collectors to just be a copy of the larger company. However,
GAI is much more diverse than BGS, with their programs for authentication of Hollywood memorabilia,
historical items, autographs and unopened packs of cards at the forefront of their respective fields.
Also, with the first cards graded at each level, a certification is issued labeling that card as
the "first graded". For example, if you are the first person to submit a 1960 Topps Mickey
Mantle and it is the first card to receive a grade of NM-MT 8 from GAI, the company will designate your
card as First Graded. This allows for sellers of these cards to receive a small, but welcome, premium
over cards that are not considered to be the first graded of their kind. It is these kind of small,
but hobby-friendly, details that are making GAI into one of the leading card-grading companies.
Look for collectors to visit www.gacard.net
more often when they begin to get long-promised features up and running such as population reports
and message boards.

So, as a collector considering card grading, which company should you use? Here is some additional
information about the pricing of each company's services and the additional features they offer
that may make your decision easier:

Quite frankly, PSA is great for fans of vintage cards and graded sets due to the Set Registry and
their experience with older cards. However, in order to directly use the PSA grading service, you
must join the PSA Collectors Club by paying a substantial annual membership fee. Then, you must
pay an additional amount per card based on the desired service level. These fees often add up for
those collectors who only wish to send in a small number of cards each year. However, membership
gives you several free card submissions and access to additional features such as the PSA newsletter,
the Set Registry, the Sports Market Report (SMR) - a handy printed and online tool that helps
collectors know the market value of their PSA graded cards - and population reports that list the
quantity of each grade given to a particular card.

BGS, on the other hand, does not offer as many additional features to its submitters, but does not
charge a yearly membership fee. Instead, collectors pay a set amount per card based on the desired
service level, then pay additional fees per card if it is a certified autograph card or a pre-1981
card. The company also provides free access to its population reports.

For its part, SGC does not charge any fees except to get cards graded. In addition, they offer
free online price guides and population reports, which are valuable tools for any collector. The
company also now offers its own set registry and is known to be very responsive to customer
inquiries. Their collector-oriented approach makes collectors feel that SGC really cares about
its customers and arguably the best grading company for considering the needs of collectors.

GAI also does not require an annual membership fee for those just wishing to submit cards for
grading, as you simply pay an amount per card based on the desired service level. There is,
however, a substantial fee in order to optionally become a GAI Premier Member. By becoming a
Premier Member, you receive a number of memorabilia items, several free card submissions and
access to their online submission status check and online grade check, which allows members to
look at where their submission is in the process including what grades they have received before
they actually receive the cards.

So, who's the leader of this group? It's a close call between PSA and BGS, but one would likely
say PSA due to their extensive experience in card grading, respected name and preference by
vintage collectors. This "vintage advantage", according to many in the hobby, is
largely due to the overwhelming popularity of the PSA Set Registry. Until the other companies
realize how big the graded-set market is, PSA looks like it will retain this advantage. In
addition, until the other companies catch up to PSA in terms of volume of older cards, which
does not appear likely, the other companies will continue to be outsold simply due to the fact
that people will think that PSA has more experience with older cards. It is similar to following
the crowd. If a collector or even just a random person sees a high number of PSA cards listed on
eBay compared to BGS, SGC or GAI, they are obviously more likely to go with PSA if they have to
make that choice.

In the end, you should simply look over the web sites, service levels, pricing and additional
features for each company and choose the one that best meets your particular collecting needs
and budget. Each of these companies is respected and likely to make your move into the graded-card
world a positive experience.

About the author
Henry Woodruff is a huge fan of vintage baseball cards. He also collects Josh Willingham and Atlanta
Braves players from all years and currently has his own website,
www.freewebs.com/writer2244/.
In his free time, he plays baseball, basketball and soccer.